Australia’s international trade – numbers that shock & awe

What’s happened to Australia’s international trade over the past 5 years? Most people know that Australia’s trade has grown strongly but I wonder how many understand the dramatic nature of the transformation that has occurred so very recently and despite the global financial crisis. Colleague RW collated figures for the year ended 2005 and for the year ended 2009 – they are derived from ABS Catalogue No. 5368 Tables 14a, 14b. I nearly fell off my seat when I saw them.

Over the 5 years total exports to our 14 major markets grew from $126b to $196b. Imports grew from $149b to $201b. Exports to China grew from $13b to $42b. As a fraction of total exports they grew from 10 to 21%. Our imports from China grew from $19b to $36b. Exports to Japan grew strongly too from $24b to $38b – Japan remains our biggest export market. Exports to India more than doubled from $6b to $14b. The really massive growth in exports of course has been concentrated in the two areas – crude materials other than fuels and in mineral fuels. Obviously terms of trade improvements – surging coal and iron ore prices in particular – have been an important factor.

The surge in our exports over recent years must have been a key factor in preventing Australia going into recession as a consequence of the GFC. It is a stunning overall picture of the enormous strength and potential of the Australian economy.

“It is a stunning overall picture of the enormous strength and potential of the Australian economy.”

It’s also a stunning picture of how lucky you can be if you sit on a gold mine and gold prices go up, and given the collapsing infrastructure of Australian cities, obviously a stunning picture of how you can waste money also.

Australia is, indeed, The Lucky Country. Donald Horne was being ironic – a bunch of dills being led by a bunch of third-raters who are doing well! I don’t know about the first part of that claim but we are doing well. There are many other resource-rich countries in Africa and South America – equally lucky! – that have not performed as well.

I’m not sure I’d use other countries as a comparison (Norway and the UAE, for example, are richer than us for the same reason, but I doubt that’s very useful to know. Botswana has also done pretty well given where they came from and the problems they face from AIDS etc., and they only have gold — yet they built schools, hospitals etc. — all the things the countries around them, including ones with resources, lack to a great extent).

I’d just like see less money wasted and some of the long term problems fixed. Notably the education system, unless people want the next generation to become the trash of their own country with all the associated problems that brings (I’ll call it “dumb male syndrome”), including declining workplace productivity.

Other things like the roads and PT should be fixed also if we are really going to have a great population explosion, and increasing the overall population’s health (cf. spending more on hospitals) would probably be worthwhile too so we don’t end up spending all our money on keeping increasingly unhealthy people living longer via interventions that might have otherwise been avoided.

I’m sure those things are more important than all the middle-class welfare scams that exist that money gets wasted on or perhaps I’m just grumpy today!

Cool it gramps. Would you rather we had no universal healthcare? Like that shining beacon of economic might we all know and hate, the US… Low expenditure on things that really matter seemed to work ok for them…. didn’t?